Individual
Customer Account – an account in
which are recorded all of the money transactions and futures trading activity
of an individual customer. Documentation required to support such an account
will usually include a New Account Information form, a Commodity Account
Agreement form, a Risk Disclosure Statement and a Transfer of Funds
Authorization. The last named form may not legally be required of a customer
by the carrying firm, but most speculative customers will sign such a document
when it is explained that, without it, each required transfer of the
customer’s funds from his commodities account to any other type of account
– for example, a securities account – will require his specific
authorization in writing.

Joint
Account (either as tenants in common or with rights of survivorship) –
an account of two persons, who may or may not be related, who wish to trade in
commodities in a joint venture. In a joint account with right of survivorship,
if one of the joint account owners dies, the entire interest in the account
immediately vests in the survivor, and the deceased’s estate has no further
interest in the account. In a tenants-in-common account, without rights of
survivorship, upon receiving written notice of the death of either of the
joint owners, the carrying member firm is required to divide the account into
equal parts, one under the name of the survivor and one under the name of the
estate of the deceased. In addition to the documentation required of an
individual customer, a joint account must be supported by a joint-account
form, signed by both parties, on which the rights and obligations of each
party to the account are set forth.

Partnership
Account – the account of two or more
individuals whose concerted operation in the business world is governed by a
signed partnership agreement. Such an account may be for a closed partnership
or for an open-end partnership, in which new partners may be added from time
to time. To document such an account, all of the forms required of an
individual Customer Account must be furnished, plus a copy of the partnership
agreement and a partnership form that outlines, among other things, who among
the partners is legally authorized to commit the partnership by giving orders,
withdrawing funds and conducting other business for the partnership.

Corporate
Account – the account of a customer
for whom a state has granted a charter to do business as a corporation. Many
hedging customers will be corporate accounts. When such an account is opened,
the commission house normally will ask to see a copy of the customer’s
corporate charter of Board resolution to satisfy itself that the corporation
is legally empowered to trade in commodities. If the corporate charter includes the
required trading authority, then the corporate customer will be asked to fill
out and sign, as a minimum, a New Account Information Card, a Risk Disclosure
Statement and a Corporate Account form. The last, among other things, names
the officers of the corporation to whom its board of directors has delegated
the authority to trade in commodities and give trade orders that will be
legally binding on the corporation. As optional forms, the commission house
also may suggest that the customer sign a Transfer of Funds Authorization and,
depending on the reputability and financial standing of the corporation, a
Commodity Account Agreement form.

Omnibus
Account – an account of a commission
house that clears its trading (house omnibus account) or that of its customers
(customers’ omnibus account) through a carrying firm. The customer of the
carrying firm is the “other” commission house, whose customers may remain
unknown to the carrying firm.

Discretionary Accountor Power of Attorney –
an account over which the owner or owners have delegated either discretionary
power to trade, or full power of attorney (including authority to withdraw
funds as well as to trade) to another. If the person holding power of attorney
is an employee of the commission house, such an account requires the
commission house office manager’s approval of each order entered.
Documentation required of such an account will include the forms required of
an Individual Customer Account, plus a signed copy of the applicable power of
attorney form. This form usually holds the commission house blameless for
actions taken on the customer’s behalf by the person to whom power of
attorney has been granted.

Custodial
Account – e.g., “Sam Jones as
Custodian for William Jones, a Minor, Under the Personal Property Laws of the
State of …” Since a minor can, once he becomes of age, contest many of the
acts taken on his behalf by a custodian while he was minor, most commission
firms refuse to accept this type of commodity account.

Fiduciary
or Trust Accounts – before opening a
commodity account for such an entity, the commission house will wish to verify
whether the fiduciary organization or trust is empowered by its indenture to
trade in commodity futures and related option contracts. Not all are so
empowered.

Investment
Company Account – provides for
trading by a number of investors who pool their resources into one fund for
the specific purpose of trading in commodities. Power to trade is usually
delegated to one or two participants in the fund or to an outsider. Special
documentation to support such an account is required.